Versace owner Capri expects revenue impact due to coronavirus outbreak

6 February 2020 (Last Updated February 13th, 2020 11:36)

Global fashion luxury group Capri has announced that the China coronavirus outbreak could hit its revenues for the fourth quarter and full-year 2020.

Versace owner Capri expects revenue impact due to coronavirus outbreak
Capri owns brands like Michael Kors, Versace and Jimmy Choo. Credit: Kat2Kat2.

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Global fashion luxury group Capri has announced that the China coronavirus outbreak could hit its revenues for the fourth quarter and full-year 2020.

In its full-year fiscal 2020 outlook, Capri estimates revenue to decrease by around $100m and earnings a share by $0.40 to $0.45.

The group has also noted that brand comparable store sales guidance ranges will not be provided in the fourth quarter.

The parent company of fashion brands such as Michael Kors, Versace and Jimmy Choo has closed approximately 150 of its 225 stores in mainland China as of 5 February.

The rest of the stores that remain open are operating with reduced hours and fewer customer visits.

Capri reported third-quarter revenue growth of 9.2%, gross profit of $932m and $210m net income, which exceeded expectations.

The company’s shares increased by 12% on Wednesday, however, they dropped by 19% this year through Tuesday, reported BloombergQuint.

Capri chairman and chief executive officer John Idol said: “We are in the midst of a dynamic global health emergency related to the coronavirus.

“The situation in China and the measures being taken to protect the population are having a material impact on our business.

“Given our current visibility, we now anticipate annual revenue of approximately $5.65bn and adjusted earnings per share of $4.45 to $4.50. This estimate could materially change if the severity of the situation in China worsens.”

Other major retailers who are victims of the outbreak include Ralph Lauren, Gap, Hugo Boss, Swatch and more.

Additionally, Nike and Apple have both confirmed store closures this week across mainland China.

Originating in Wuhan, China, the 2019 novel coronavirus (2019-nCoV), has infected a total of 28,289 people and killed 565 people worldwide as of 6 February.